Whitbread on track to slurp up a profits rise as Costa continues growth

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Costa leads a positive outlook for its owner (Source: Getty)

Alys Key

Premier Inn and Costa owner Whitbread is set to post a rise in profits when it reveals annual results this Tuesday.

The company, headed by former Lloyds banker Alison Brittain, is expected by analysts at Deutsche Bank AG to post pre-tax profits for the year to March 2017 will rise by 3 per cent to £563m, up from £546.3m in 2016.

But analysts predict that Whitbread will remain wary in the face of volatile trading conditions. The company’s last set of results showed that despite a boost to Costa sales, the Premier Inn chain had been hit by a slowdown in the London hotels market.

Other City analysts maintained a positive outlook for the company, with Berenberg Bank noting the Costa Express vending machine arm of the business as a “hidden gem” with potential for growth. At the close last week Whitbread’s share price was down 15p to 4204p.

Growth across Whitbread’s portfolio, which also includes four restaurant brands, is expected to continue this year. Last month Costa quadrupled its coffee roasting capacity with the completion of a new £38m facility to cater for growing demand.